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October 05, 2008

Schwarzenegger Vetoes Health Insurance Bill

Gov. Arnold Schwarzenegger vetoed a bill Tuesday that would have cracked down on health insurance companies that cancel policies of people who make expensive claims.

Schwarzenegger, in a memo to lawmakers, called the so-called rescission practice “deplorable,” but noted he vetoed the bill because it lacked several consumer protections and was “written by the attorneys that stand to benefit from its provisions.”

The measure would have established an independent review process of each case and required that policies be rescinded only if insurers prove consumers willfully misrepresented their pre-existing conditions on a policy application.

Schwarzenegger said he wanted the bill to include six other protections, including a requirement that companies continue California health insurance coverage for family members of someone whose policy has been dropped.

Assemblyman Hector De La Torre, D-South Gate, who sponsored the bill, said the governor's criticisms were ill-founded. He said the family protection provision was left off the bill because it was contained in a different measure that the governor approved, Assembly Bill 2569.

“The governor is not fulfilling his obligation to the insured population of California,” De La Torre said. “For the foreseeable future they will be able to be dumped with impunity, as they have in the past.”

De La Torre also noted that the governor had stonewalled legislators in negotiations.

“It's good enough for him to get an applause line in the State of the State address, but it's not good enough for him to follow through and work with Legislature to make it happen,” he said.

Daniel Zingale, the governor's top health adviser, said Schwarzenegger's opposition to rescission is clear, noting that the state has taken several actions against California health insurance companies during his administration.

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Posted by healthinsurance at October 5, 2008 03:29 PM